Book Review “The Patch”

The People, Pipelines, and Politics of the Oil Sands

by Chris Turner

I requested a review copy of this book ahead of publication from NetGalley. That means I got a document – as opposed to an ebook – which was not in its final format, and is awkward to quote from. That also means some of the information and hard data was missing. And I did notice that several passages seem to be repeated: for instance, the anecdote about the Fort McMurray WalMart being too busy to stack the shelves – and too short of staff – that goods were simply left on pallets in the aisles. In fact a lot of the book is composed of stories and anecdotes, most of them engagingly told. I found it easy to get absorbed and stay engaged – so it would be a good choice if you have a long flight.

The publisher’s blurb is clear

“The Patch is the story of Fort McMurray and the oilsands in northern Alberta, the world’s second largest proven reserve of oil. But this is no conventional story about the oil business. Rather, it is a portrait of the lifecycle of the Patch, showing just how deeply it continues to impact the lives of everyone around the world.”

So it is not a polemic. Even though the author ran as a candidate for the Green Party, he does his best to remain even handed. Though my feeling was that perhaps he tries a bit harder to defend the “ordinary people” who work in the Patch, and clearly feels that they have not necessarily been treated well by the media or the opponents of fossil fuels. There is very little about the people who are actually responsible for the current direction of development. The Koch Brothers get a passing mention, as does Warren Buffet, but by and large the main characters are the people who deal with the actual work or are directly impacted by it. One of the leading characters is a bus driver, for instance. Another belongs to a local First Nation, who tries to combine working in the patch with a some maintenance of the traditional hunting for food.

Politicians do get get quite a bit of attention, as do some of the people who made the initial discoveries and technical advances. But financial and boardroom battles are generally treated lightly. This is not investigative journalism or muck raking, but it is frank about some of the rather cavalier attitudes towards issues like clean air, clean water and climate change. He is actually tougher on the environmentalists, who are given somewhat harsher coverage, I think. He is no fan of Bill McKibben, for example. He is quite clear that the Patch got chosen to be the poster child for climate change responsibility when in fact he feels we all share equally the responsibility for the daily choices that make the burning of fossil fuels inevitable.

It is also quite clear that Canadian politicians made the key decisions that created the present situation. The extraction of usable fuel from the tar sands was always a very dodgy proposition – technically and financially. It was never really an easy choice to make given that there were at most times other sources of usable petroleum easier and cheaper to extract and market: but mostly in other places. The oil industry – and the politicians – both wanted to be able to secure supplies closer to their markets, and under the control of governments that would be if not always friendly at least understanding and amenable. Dealing with regimes in places like the Middle East and West Africa is not an easy way to make a fortune.

On many occasions the companies engaged in developing the Athabasca tar sands had to review falling prices, rising costs and seemingly endless production problems. The book deals with these in a breezy, informative way without too much jargon or technical bafflegab. Many times it must have looked like it was a losing proposition that had already cost a fortune, looked unlikely to be profitable even in the long term and was not going to be simple to remedy. Huge sums have been invested, and still need to be spent, to make the process of extraction and processing possible if not exactly viable. What has always made the critical difference has been politicians willing to commit public funds where skeptical commercial decision makers saw huge risks and doubtful rewards. As we have seen in BC with LNG recently, this is not an unusual position for Canadian politicians to take. And it is not confined to energy either: there are always people only to ready to detect possible boondoggles where public funds are being used for major capital projects. Indeed, I think that kind of mindset may be one of the things behind the popularity of public/private partnerships. As we have seen only too clearly, too often the private sector has been the major beneficiary of unwillingness to go for the conventional public sector route.

The key decision in the book is the one made by Jean Chretien in the mid 1990s to provide tax breaks to rescue the industry, in particular the two major oil sands producers, Suncor and Syncrude Canada Ltd. He also persuaded Ontario to join with Alberta and the federal government in making capital investments when one of the original investors dropped out. Indeed one of the recurring themes is how often the uncertainties of the extraction process and a drop in oil prices almost stopped development, but how local and national politicians remained committed to seeing the development of the industry – both for the jobs and the revenue streams it promised.

There is a widespread misconception that oil and gas dominates the Canadian economy. In fact it is (with mining) around 8% of GDP and less than 15% of exports. Neither figure appears anywhere in this book. Indeed, much of the time, the usual story of how dependent we are on fossil fuels – and especially oil – is emphasized. There is no mention of the possibility that this is in the process of changing – and changing rapidly – thanks to the improving technology and falling cost of renewables like solar and wind power. Nor the rapidly increasing sales of electric vehicles for both private and commercial uses, and the decline of car ownership and use in urban areas threatening the dominance of oil for transportation energy.

I was quite taken aback by the number of times some phrases and dates recurred in the text. “On any given day” and “2015” were frequently cited. That’s because most of the story is set in Fort McMurray – and everything changed there, very dramatically, with the fire in 2016. That, of course, gets its own chapter.

When I was reading the book the news was full of hurricanes – Irma was demolishing Barbuda and threatening havoc in Cuba and Florida. We were enjoying – at long last – a refreshing break from a summer of heat and smoke from wildfires. Climate change does get attention – but somehow more with the connotation that it is the obsession of a minority rather than the concern of everyone – which of course is quite understandable when written from a North American perspective and where the most recent official policy in Canada and Alberta is that the oil patch is considered an essential component of an orderly and economically viable transition to renewables, in due course, in the fullness of time, with due regard to the realities yadda, yadda.

Again there is no mention that the horizon for taking effective action to limit climate change to a point where human life is even possible is getting much closer – three years is the most recent estimate . This is not a matter where we can give both sides equivalence. Yes, there will still be motor vehicles and they will still need liquid fuels. The probability that we can change fast enough to avoid 2ºC of global warming – and all the tipping points that get triggered along the way – is by no means assured. And the consequences of failing to slow the current rapid increase of fossil fuel consumption are going to be dire.

It does not comfort me at all that the key decisions are going to be made by the current generation of politicians, and I do notice that Canada has not only fallen far behind the leaders in dealing with climate change but shows no sign at all of tackling the problem with the urgency it demands. So the conclusions of this book that we will have to put up with political necessity and unsatisfactory compromises is both true and truly depressing.

That doesn’t mean I don’t recommend this book as a worthwhile use of your time. But do not expect to get anything more from it than the idea that somehow we will muddle through. Frankly, I do not think that is Good Enough this time. I think we need a more trenchant critique of Trudeau and Notley – and a more hopeful look at some of the alternatives. And actually in areas like wind power Alberta is actually far ahead of BC. Not that that is saying much either.

5 Responses

A few years back the peak in cheap conventional oil drove prices high enough to make the oil sands and other expensive unconventionals economically viable. Today, though prices are much lower and have caused the cancellation of oil sands projects not far enough advanced — or contrarily, too large to not continue — the situation reflects a world glut after U.S. shale plays flooded the market and the Middle East kept the spigot open to further erode prices in an attempt to undermine their shale competitors. That obviously hasn’t quite worked out as planned.

Meanwhile, as you mentioned, renewables continue to multiply and their prices have come down while their quality has increased. But they are not a panacea or a direct watt-for-watt replacement for fossil energy consumption. Renewables do not have the same energy density or net energy as fossil fuels and are beset with a huge intermittency challenge. Moreover, transmission infrastructure investments remain inadequate for the larger geography required by wind and solar. Geothermal shows great promise in B.C. but has not been developed, not even to an infant stage. Ditto for tidal. Hydro remains the best we’ve got; even with the problematic methane release from decaying organics at the bottom of reservoirs and leached mercury from underlying rock formations, it remains one of the best replacements we have to the dominance of fossil fuels.

Newman and Kenworthy have done the math to prove not only that car dependency has plateaued and in some areas has declined in cities, but that cars and oil have become detached from per capita GDP in several countries. As primarily electrified public rail transport has been pushed through in many cities, wealth grew while per capita oil consumption and private vehicle kilometres declined.

Today we now have China joining France and the UK promising to stop developing cars with internal combustion engines and liquid fuel requirements, opting instead for electric cars. In effect, demand destruction could kybosh the stated rationale for bitumen exports! However, like energy replacement (renewables for oil), vehicle type replacement remains problematic. First, demand for cars overall has flattened, and their massive infrastructure is increasingly seen as too expensive to sustain with public finances. Second, replacing ICEs with EVs will replace demand for oil with demand for electricity, which will result in a doubling or tripling of power generation capacity (several Site C’s) and increasing demand for other non-renewable resources, like lithium, cobalt and copper, all of which predominate in batteries. A lithium shortage is now predicted for the 2020s and 2030s.

In these ever-popular scenarios conservation is overlooked. The most likely scenario to fight climate change and address resource depletion will be a significant reduction in energy per capita consumption and a decline in funding for inefficient public infrastructure, such as wasteful 10-lane bridges and freeways.

It gets down to building walkable and transit-oriented communities, investing public funds wisely in transit and conservation, promoting human ingenuity, intellectual property patents and innovation over extractive economic models, and lowering our consumer expectations. I suggest all this will be forced on society because the original 2-degree limit posed by Paris COP 21 was exceeded years ago when you add already-released methane and nitrous oxide to CO2, which when converted to CO2 equivalent means that we have far exceeded 500 parts per million and 4-degrees warming already. Yet we are still flying, driving and generating millions of tonnes of hot air talking about the issue.

Senior governments have proven to be too weak or ideologically blinded to do anything meaningful on this file. Our best hope lies in cities and local government.

Reprocessing waste seems very wise. I can see that lithium extraction from oil waste water could be a sideline, or perhaps plastics and lithium extraction will become the primary (albeit much smaller) industries in Fort MacMurray one day as markets for exported heavy bitumen dry up. Nonetheless, one article (link below) does document an estimate of the world lithium supply after a radical increase in EVs, as well as the hidden emissions. The sudden rise in demand for lithium could push the supply issue to the forefront.

The article also contains this interesting comment:

Clearly, EVs alone are not enough to reduce greenhouse gas emissions or attain sustainable transport in general. The first step is to work on switching the electric grid to cleaner renewable energy and installing more residential solar, so that driving an EV emits less CO2. However, another important step is redesigning cities and changing policies so that people aren’t induced to drive so many private vehicles. Instead of millions of private vehicles on the road, we should be aiming for walkable cities and millions of bikes and electric buses, which are far better not only for human health, but also for the environment.

“The needless deaths of these 123 birds is an urgent reminder of the ongoing threat these toxic lakes of tar sands sludge pose. How many more incidents like this need to happen before government finally does something to solve the problem? The past five Albertan Premiers, dating back to Ralph Klein, have each said that they will deal with Alberta’s sprawling toxic problem and yet tailings ponds continue to grow.

The volume of Alberta tailings ponds has now reached more than one trillion litres — about enough to fill 400,000 Olympic-sized swimming pools. And, every day, about 6.5-11 million litres are estimated to leak into nearby rivers, posing a threat to nearby communities.

This is going to keep happening until the federal government actually enforces the laws designed to protect wildlife from toxic substances and the Alberta government puts an enforceable plan in place that sees tailings ponds cleaned up from Alberta’s landscape for good.”

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I am a transportation economist and regional planner, displaced from England by the abolition of the Greater London Council and a dislike of Thatcherism. Until March of 2004 I worked for the Greater Vancouver Transportation Authority on wide variety of policy issues. None of these have been solved since I left, and the region has abandoned its long established growth strategy altogether, as the province expanded its major highways and is now proposing another new bridge over the Fraser. I have long advocated more sensible policies to better integrate transport and land use. And this blog is a way to keep up the pressure! It also allows me to vent a bit on related issues.